Mayor Ed Lee wants “a little more thought” on renewable energy deal

One the sidelines of an event where PG&E was a major sponsor, Mayor Ed Lee sought more time for the debate about San Francisco's community choice aggregatio program. (The Chronicle)

San Francisco Mayor Ed Lee on Monday asked city supervisors rework a renewable power option for residents that he considers financially risky, despite eight years spent getting the city to this point.

“I’m going to ask them to spend time with me to see if we can find this alternative,” Lee said. “If it ends up being an extension of time, we ought to give ourselves enough time to do that.”

Lee was speaking on the sidelines of an electric vehicle event in Justin Herman Plaza where one of the chief sponsors was PG&E, whose decades-old monopoly on the consumer power market in its headquarter city would end under the renewable power program being considered at the Board of Supervisors on Tuesday.

The legislation would allocate $19.5 million in public funds to secure a contract with Shell Energy North America to provide 100 percent renewable power to San Franciscans who want to pay a premium for it. Some $6 million from that total would go to studying local power-generation options and funding solar and energy efficiency programs.

CleanPowerSF is designed to build a customer base and revenue stream to lay the groundwork for city-owned renewable power generation while advancing San Francisco’s aggressive greenhouse-gas reduction goals.

Lee says he agrees with the policy goals but is concerned that many people will have to actively opt-out, that the average increase for utility bills is about $18 a month, and that $13.5 million in public funds could be at risk if not enough people sign up for the program.

“It’s really economics,” Lee said, “and concerns about (an) opting-out program, where people always complain they never got the notice. ‘Why is my bill going up $18?’ Are we putting $13.5 million at risk? Are we getting rid of 95 jobs that we don’t have to? I want a little more thought about that, and I want to work with the supervisors about getting enough time that we consider every single option to not suffer those consequences and still get a good program.”

Lee stopped short of saying he would veto the legislation if the Board of Supervisors approved it as is.

Supervisor David Campos, the sponsor of the legislation, said Lee’s administration had not been in contact with him about potential changes. Several other supervisors said they had also not be approached about modifications.

“There is no policy justification for waiting,” Campos said. “This is a program that the mayor’s own (Public Utilities Commission) and the mayor’s own Department of the Environment are saying is a sound program that is good for the city.”

The opt-out issue, rather than allowing customer to opt-in, is a requirement of state law, officials have said. The city’s chief economist found that the 95 projected job losses represent 0.01 percent of the city’s employment base. The figure also doesn’t factor in any jobs created from potential future construction of local power generation facilities.

San Francisco Public Utilities Commission chief Ed Harrington, the former city controller, says the current proposal, after years of stops and starts, is fiscally responsible and realistically can’t be improved.

“We think this is the best program,” Harrington said recently. “If somebody says, ‘I just don’t like opt-out’ and to try again … there’s nowhere to try again.”

Critics of the deal, including the local branch of the International Brotherhood of Electrical Workers, say it’s impossible to tell how much utility bills will rise for customers in the CleanPowerSF program.

The SFPUC says utility bills will increase by anywhere from $9.55 to $77.86 a month for customers depending on their usage, with the average increase for residential customers being $18.53. According to the SFPUC, about 43 percent of residential customers fall into the lowest pricing tier, with current monthly bills of about $40 and an expected increase of less than $10 if they stay in the renewable energy program.

But Hunter Stern, business representative for Local 1245 of the electrical workers’ union, said “truthfully, no one knows” how much bills will go up.

“No one knows today what the composite will be of those forced into the program and then don’t opt out,” Stern said.